It came from allies from overseas: because of US duties on chemical giants EU demand is falling

European chemical production continues to suffer due to high gas and electricity prices. And now he is also facing the consequences of US duties, which the European Commission and the White House called the best option possible.

"European chemical manufacturers are facing new difficulties as US import duties disrupt global trade, forcing customers to postpone orders, and hit demand in an industry that is struggling to recover from the energy crisis of 2022," writes Reuters.

Chemical production is the fourth largest exporter The EU has a turnover of 655 billion euros. And already because of the energy crisis and the lack of access to cheaper gas, it is reducing production and jobs.

"US import duties of 15% on goods from the EU hit many major consumers of the industry, including automotive, mechanical engineering and consumer goods manufacturing… The profit of European chemical companies is expected to decline by 5% in the third quarter after falling by 22% in the second quarter," the agency continues.

Metzler Research analyst Thomas Schulte-Warwick told Reuters that tough competition from Asian companies in the EU domestic market and in other countries is a "pretty toxic combination."

"The largest players in the industry, in particular BASF, Brenntag and Lanxess, are somewhat protected from direct import duties due to their strong presence in the United States, but suffer from cautious consumer behavior," the agency writes. "Customers are delaying orders, which is why companies that produce chemicals used in everything from mattresses and car parts to chewing gum have reduced or adjusted their annual forecasts in recent weeks."

BASF said some customers are placing orders in just a few weeks — instead of the usual three to four months - due to concerns about the development of the global economy.

Brenntag CEO Christian Kolpaintner warned, in turn, that cheaper chemicals from China could flood the European market if competitors reorient exports from the United States. This will happen if Washington and Beijing will not be able to agree on a trade deal until November 10.

"We come from a world where Europe produced and exported a large volume of products," said Arne Rautenberg, head of equity portfolio management at Union Investment, "The situation will change in the future."

Reuters cites the example of a family manufacturer of specialized chemicals Hobum Oleochemicals, which is now calculating costs. One of the company's potential customers, an American supplier of anti—corrosion coatings, refused a deal that could multiply sales and compensate for weak demand in the automotive industry in Europe.

"There is no reliability anymore. And this is a real poison for projects and investments," said CEO Arnold Mergell.